Egypt’s net foreign reserves dropped sharply to $15.536 billion at the end of July, the central bank announced Sunday. Reserves stood at $17.546 billion at the end of June.
Egypt had roughly $36 billion in reserves before an uprising in 2011 overthrew Hosni Mubarak. That ushered in a period of political turmoil that scared away tourists and foreign investors, key sources of foreign exchange.
Foreign currency reserves in July were further drained as Egypt returned a $1 billion deposit to Qatar and paid $720 million in fees to the Paris Club of creditor nations.
The dollar shortage has stifled business activity in the heavily import-dependant country, with goods stacking up at ports and investor confidence dropping.
The central bank has been rationing its dollar reserves through regular weekly sales, keeping the pound artificially strong at 8.78 per dollar.
Egypt devalued the pound by 13 percent in March in an effort to close the gap between the official and parallel rates, which hovered at around 12.5 last week, but the move failed to boost dollar liquidity or close the gap.
Source: Reuters
